Chelsea 8-2013-mscsm-dl-presentation


Published on

The project draws attention to IKEA’s usage of multiple channels to reach its customers, however, it also points out the fragmentation of these channels.
On detailed analysis, the report makes the following recommendations:
• Improve process efficiencies to cope with logistics and ecommerce
• Shift from Multi-Channel to Omni-Channel
• Integrate offline and online initiatives
• Implement emerging technologies

This report concludes that these recommendations will help IKEA remain differentiated and maintain market leadership in an industry that is continuously evolving.

Published in: Marketing, Business, Technology
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Differentiates itself not only through product innovation, but operational management, making it the most cost efficient furniture supply chain in the world
  • Ecommerce/Mcommerce: New gateways to reach people and promote products and services.eCRM– Interactive means to engage customers and establish stronger stronger customer relationshipsSocial Media as word of mouth review channels – Increasing influence of Social Media which encourages potential customers to gain feedback from previous customers.Technology Adoption : Newer technologies such as AR , 3D printing provide new and interesting ways to promote products and improve efficiencies. Customer’s traditional Buying Behavior :Shopping online for furniture (43% still prefer to buy furniture in store in UK, Mintel 2013). Minimal interest on discussing Furniture : How do you make furniture something people want to talk about? Brand-watch points outs that customers use social media for reviews. But when you look specifically for conversations, it’s on corporate messaging being posted on news websites and forums. Also Mintel further supports this by claiming that even though 38% of customers read online reviews before buying a product in-store, It’s a challenge to encourage previous customers to post reviews on any forum.Increasing Logistics Demand : With the advent of new age logistic solutions including the Amazon Drones, Its evident that online shopping retailers consider Logistics as a challenge and a key differentiator. Its not important to have an efficient transactional website but also to meet the demand created by the operation of such a website.
  • Multii Brand v.s. Owned BrandJohn Lewis 2nd biggest While most furniture companies still use traditional media like TV, Print and OOH advertising, digital media has changed the way in which retailers both sell and market their products
  • Restructure consumer journeyIKEA’s online catalogue and ecommerce platform has allowed consumers to purchase furniture online or research specific pieces before purchasing in-store25% increase in UK sales based on ecommerceImprove customer relationship management (CRM)In 2005, IKEA launched “Ask Anna”, a web bot that utilized instant messaging to help users navigate website, significantly reducing CRM costs from call centersLeverage digital technologies to mitigate overhead marketing costsViral marketing via Social MediaDigitally produced catalogue images accounted for 12% of IKEA’s 2013 catalogue
  • Greatest challenge IKEA faces is ensuring that all their digital platforms work together to create a unified users experience
  • IKEA must anticipate consumer behaviour throughout offline and online experiences
  • Objective of the IKEA Catalog is to showcase its furniture for the upcoming yearSince the 1950’s, IKEA has spent 70% of its annual marketing budget on the catalogue
  • 1997Known as the “World Wide Living Room Website”Contained limited product information and only provided a brief history of company and company vision1999Re-launched website to include product guide, assembly tips, store locator, and ability to order physical catalogue2000Launched first ecommerce platform Tested first in Sweden and Denmark and then expanded country by country
  • Font FONT Verdana is default web fontChanging font to suit digital trends exhibits dependency on digital mediaMOBILE APPFirst launched in the UK3.5 million downloads in 2009 grew to nearly 10 million downloads in 2013Distribution of printed catalogue dropped by 40% in the UK between 2009 and 2013
  • Swetha to edit video to 30 secs
  • Up until 2009, IKEA relied heavily on distribution of catalogue and traditional advertising like print, OOH and TV commercialsIn 2009, IKEA joined Facebook followed by YouTube, Twitter and Pinterest
  • RESULTS: By posting 12 photos in the span of two weeks, IKEA was able to encourage thousands of users to personally promote IKEA products
  • First major change in Google algorithm since 2001Affecting 90% of search queries, Google is trying to establish conversational search for usersEmphasis on original and engaging content and other factors like technology features, social signals, and backlinks
  • Chelsea 8-2013-mscsm-dl-presentation

    1. 1. DIGITAL LANDSCAPE CHELSEA 8 December 10th, 2013
    2. 2. Table of Contents • • • • • Introduction Digital Challenges & Opportunities Competitors IKEA’s Business Strategy Multi-Channel v.s. Omni-Channel • IKEA Catalog • IKEA Advertising • Current Challenges & Recommendations • Conclusion
    3. 3. Introduction Swedish furniture company started by Ingvar Kamprad in 1943 Largest retailer of ready-to-assemble furniture and furniture accessories globally. As of 2012, IKEA had: • 298 Stores in 26 countries • €27 Billion in Sales The most cost efficient furniture supply chain in the world
    4. 4. Opportunities & Challenges Opportunities Challenges • E-commerce/M-commerce • Traditional buying behaviour • Customer Relationship (eCRM) • Minimal interest on discussing Furniture online • Social Media/ Word of mouth advertising
    5. 5. Digital Competitors Types of furniture retailers Multi-Brand Retailers Exclusive Brand Retailers Digital media has changed the way in which furniture retailers both sell and market their products • Websites & Mobile Apps - Online catalogues - E-commerce & M-commerce • Social Media - Raise brand awareness
    6. 6. Digital Strategy IKEA has leveraged digital media to adapt their business strategy in 3 specific ways Restructure Consumer Journey Improve Customer Relationship Management (CRM) Leverage digital technologies to mitigate marketing costs
    7. 7. Multi-Channel Digital media has led to the multiplication of touch points between businesses and consumers
    8. 8. Omni-Channel “Truly integrated approach across the whole retail operation that delivers a seamless response to the consumer experience through all available shopping channels” (LCP Consulting 2013)
    9. 9. IKEA Catalog The success of IKEA has largely depended on publishing the IKEA Catalog
    10. 10. IKEA Catalog IKEA Catalog remained unchanged until 1997 when they launched their first website 1997 • Known as “World Wide Living Room Website” • Contained limited product information and only provided a brief history of the company and company vision 1999 • Updated version included: - Product Guide - Assembly Tips - Store Locator - Ability to order catalogue 2000 • Launched first ecommerce platform • Tested first in Sweden and Denmark expanded country by country
    11. 11. IKEA Catalog After substantial growth in sales from €7.6 Billion in 1999 to €21.5 Billion in 2009 due to digital initiatives, IKEA made two major adaptations to their catalogue
    12. 12. IKEA Catalog IKEA Mobile Application • VIDEO:
    13. 13. IKEA Advertising IKEA’s Social Media Channels These Social Media platforms introduced the idea of content marketing • “Creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience – with the objective of driving profitable customer action.” (Content Marketing Institute)
    14. 14. IKEA Advertising THE FACEBOOK SHOWROOM • OBJECTIVE: Generate Buzz around the new store opening in Malmö • STRATEGY: Leverage Facebook’s tagging functionality
    15. 15. IKEA Advertising HAPPY INSIDE • OBJECTIVE: Challenge the perception that IKEA sells lowquality furniture • STRATEGY: Let cats decide! • VIDEO:
    16. 16. IKEA Advertising • EVERYDAY DIFFERENT • OBJECTIVE: Get consumers to explore IKEA’s vast range of furniture • STRATEGY: Produce a commercial for every day of the year • VIDEO:
    17. 17. IKEA Advertising • MAKE SMALL SPACES BIG • OBJECTIVE: Position IKEA as the solution for Small Spaces • STRATEGY: Utilize small spaces on the internet
    18. 18. Challenges &Reco’s Fulfillment Channel Integration • Ecommerce has created increased demand for IKEA products • Currently operating on multiple channels, but campaigns seem disjointed • IKEA should implement a real-time inventory reporting system • IKEA should ensure all campaigns online link to each other and have the common objective of driving to purchase Google Hummingbird • Google is making the most changes to its algorithm since 2001 • All platforms will need to be integrated to ensure optimum search performance Digital Trends • New tools are constantly being invented, but it is impossible to activate on all of them • IKEA should plan to adapt Google Glasses and 3D printing
    19. 19. Conclusion IKEA has pioneered the use of digital media for furniture companies, however, IKEA is still evolving as an Omnichannel retailer Continuous innovation without process efficiencies and integration will prove detrimental to the brand
    20. 20. Tack såmycket!